2004 (6) TMI 606 - HC - VAT and Sales Tax

Issues Involved
1. Legality and validity of the order of assessment dated September 5, 1998, and the revisional order dated May 17, 2000.
2. Invocation of section 37(1) of the Assam General Sales Tax Act, 1993, for rectification of assessment.
3. Interpretation of "arithmetical mistake" or "mistake of a factual nature apparent from the record" under section 37(1).
4. Entitlement to tax exemption under the Industrial Incentive Scheme and the 1995 Scheme.
5. The impact of the base year production on tax exemption.

Detailed Analysis

Legality and Validity of the Orders
The writ application challenges the order of assessment dated September 5, 1998, and the revisional order dated May 17, 2000. The petitioner, a small-scale industrial unit engaged in manufacturing, was granted tax exemption up to June 17, 1998, under the Industrial Incentive Scheme. The Superintendent of Taxes, Bongaigaon, initially determined the tax payable as Nil. However, a notice for rectification was issued on July 15, 1998, leading to a reassessment and a demand of Rs. 1,70,625. The Joint Commissioner of Taxes upheld this reassessment.

Invocation of Section 37(1) of the Assam General Sales Tax Act, 1993
The petitioner argued that invoking section 37(1) was unwarranted and that the Superintendent of Taxes could not reopen the matter in the manner it was done. Section 37(1) allows rectification of "any arithmetical mistake or other mistake of a factual nature apparent from the record of the case." The petitioner contended that the reassessment did not fall within the scope of this provision.

Interpretation of "Arithmetical Mistake" or "Mistake of a Factual Nature Apparent from the Record"
The court examined whether the original assessment contained any arithmetical or factual mistakes apparent from the record. Citing various precedents, including Master Construction Co. (P.) Ltd. v. State of Orissa and Sri Pankaj Kumar Dasgupta v. State of Tripura, the court noted that such mistakes should be obvious, patent, and self-evident. They should not require elaborate arguments or re-investigation of facts or law. The court found that the reassessment was based on new reasoning unrelated to any apparent mistake in the original assessment.

Entitlement to Tax Exemption under the Industrial Incentive Scheme and the 1995 Scheme
The petitioner was initially granted tax exemption under the 1991 Industrial Incentive Scheme, which was recognized in the original assessment. The court referred to Manjushree Extrusions Limited v. State of Assam, which held that benefits under the 1991 policy could not be curtailed by the 1995 Scheme. The court found that the petitioner's entitlement to tax exemption was wrongly reassessed based on new and unrelated reasoning.

Impact of Base Year Production on Tax Exemption
The reassessment notice claimed that the sale of the base year was not considered, which was allegedly apparent from the record. The petitioner argued that there was no arithmetical or factual mistake in the original assessment. The court found that the reassessment introduced a new argument regarding base year production, which was not part of the original assessment or the records. This new reasoning was beyond the scope of section 37(1).

Conclusion
The court concluded that the impugned orders dated September 5, 1998, and May 17, 2000, were not sustainable and were liable to be set aside. The reassessment did not fall within the scope of section 37(1) as it introduced new reasoning unrelated to any apparent mistake in the original assessment. The writ petition was allowed, and the impugned orders were quashed. There was no order as to costs.

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